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Kentucky’s economy remains strong, but report shows stagnant, inadequate pay in many areas

While Kentucky’s economy as a whole has been in a period of recovery ever since 2010, jobs continue to be lacking in many parts of the state and wages remain stagnant and inadequate to make ends meet, according to a new report released this week by the Kentucky Center for Economic Policy (KCEP).

KCEP’s Labor Day publication, “The State of Working Kentucky 2018,” looks at the condition of the state economy through the lens of workers and families. It outlines a recovery from the Great Recession that is slow, uneven and incomplete. Inequality is growing rapidly, and inequities persist among Kentuckians of different races, genders and regions — and in some cases are growing.

“A CEO might think the economy is soaring because they see it in their paycheck and investment portfolio,” KCEP Executive Director Jason Bailey said. “But from the point of view of the typical Kentucky worker, good jobs are difficult to find and wages remain stuck — as they have been for the last couple of decades.”

Among the key findings of the report are:

• The gap between metro and non-metro Kentucky has grown dramatically since 2010, with metro Kentucky experiencing significant job growth and the non-metro part of the state adding essentially no net new jobs over that time period.

• The share of the Kentucky prime working-age population employed is still below where it was in 2007 and the state is the equivalent of 60,000 jobs short of where it was in the much stronger economy of 2000.

• State job growth has been modest in the recovery and has slowed the last couple of years, averaging 1,073 net new jobs a month since the beginning of 2016 compared to 2,561 net new jobs a month in 2014 and 2015.

• Kentucky’s low labor force participation rate compared to other states is heavily influenced by the rural nature of the state and rural job losses in sectors like coal mining, certain types of manufacturing, and public sector employment caused by state and federal budget cuts.

• A Kentucky full-time, year-round worker at the 30th percentile of earnings — $12.51 an hour —makes just more than half of what is needed for a basic Kentucky family budget in a household of one adult and one child.

• Women in Kentucky make 83 cents for every $1 men earn, and black workers make 83 cents for every $1 white workers receive.

• Inflation-adjusted wages for the median Kentucky worker were 0.5 percent lower in 2017 than they were in 2001.

“More must be done at the state and federal level to spur job growth and increase job quality,” Bailey said. “Congress should be pursuing direct job creation in distressed regions like eastern Kentucky and expanded investment in needs like infrastructure, and the Federal Reserve should hold off raising interest rates until wages truly begin to grow. The state should be increasing standards for job quality through policies like raising the minimum wage, and reversing budget cuts that are causing job loss in vital public services across the state.”

The full report is available online at kypolicy.org.

From Kentucky Center for Economic Policy

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